Lindsey Co. was formed on January 1 of the current year. Its articles of incorpo

Question

Lindsey Co. was formed on January 1 of the current year. Its articles of incorporation authorize the issuance of 1 million shares of $10 par value common stock. On February 1, it issued 200,000 shares for $2.5 million. On April 30, 10,000 shares were issued to a management consultant in exchange for services rendered. These services had a fair value of $120,000. On November 1, Lindsey issued 40,000 shares for a plant site when the fair value of the stock was $17.50 per share. Assuming that the foregoing were the only transactions affecting the paid-in capital accounts in the first year of Lindsey's operations, what was the balance of additional paid-in capital at year end?

Explanation / Answer

Additional paid In capital is paid in capital in excess of par

Transaction Additional paid In capital 1 2,500,000- [200000*10] 500000 2 120000-[10000*10] 20000 3 40000[17.5-10] 300000 Additional paid In capital 820000

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.